The current account deficit is likely to widen in the June quarter to 1.8-2.0 percent of GDP, while it is likely to remain under control for the current fiscal year, as per a DBS report.
Though the widening of current account deficit is likely to raise concerns briefly over wider trade imbalances, the full-year current account deficit is likely to remain within control.
As per official figures, the current account deficit shrank to 1.3 percent of GDP (USD 27.5 billion) in 2014-15 from 1.7 percent (USD 32.4 billion) in 2013-14.
The DBS report said that on quarter-on-quarter basis imports rose 2.8 percent in the June quarter while exports fell five percent.
Moreover, service sector trade surpluses also fell for three successive months to May 2015. DBS expects the April-June current account deficit to widen to 1.8-2.0 per cent of GDP, from 0.3 per cent in the quarter before.
